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Trimark veteran MacDonald joins exodus from AIM fold

FUNDS REPORTER

Geoff MacDonald, a star manager at mutual fund giant AIM Funds Management Inc., has resigned, but it is not clear where he will ultimately land.

Mr. MacDonald was involved in running about $12-billion in assets as lead manager or co-manager of the Trimark Income Growth, Trimark Canadian Endeavour and Trimark Global Endeavour funds.

"I would certainly like to come back to this business as part of a smaller company, or potentially start something," the 36-year-old fund manager said yesterday in an interview.

But he can't work for four months because of a non-compete clause. "I haven't signed with anybody [yet]," he added.

AIM Funds Management, which has about $50-billion in assets, is a subsidiary of British-based Invesco PLC. Invesco (formerly Amvescap) acquired Toronto-based Trimark Financial Corp. in 2000.

Mr. MacDonald and former colleague Keith Graham, who left in 2003 to join AGF Management Ltd., were hired by Trimark in 1998 from Ontario Teachers' Pension Plan.

Mr. MacDonald's departure follows the resignation of Patrick Farmer, AIM's chief investment officer. He quit in June, but has agreed to stay until October as part of his non-compete period.

Another major departure was in 2004 when AIM manager Bill Kanko left to start his own shop, and now runs global funds for Hartford Financial Services Group Inc.

One former Trimark employee said the departures can be explained by the fact the takeover of Trimark by Invesco has been a "big adjustment." The Trimark culture was a "smaller, tightly knit group" building a business together compared with a huge multinational corporation with lots of layers, the source said.

Phil Taylor, head of Invesco's North American business, is not concerned by Mr. MacDonald's resignation, saying in-house managers like Don Simpson and Clayton Zacharias have been "groomed" to take over two of the funds.

Most fund analysts describe Mr. MacDonald's departure as a significant loss, and have his funds "under review." But they indicated that investors need not redeem in a panic or switch out of their funds because AIM uses a team approach where the lead manager is accompanied by a co-manager. "They try not to let managers run a one-man show," said Morningstar Canada analyst Bhavna Hinduja.

© 2007 The Globe and Mail. All rights reserved.

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